got a question about buying land

[bountyhunter69]

hi all,i have a question about a BOL im looking at and seriously thinking about buying..the owner is going to finance it for me,whether he has clear deed or has a mortgage on it i dont know,i do know if he owes for it,the check will be wrote to both him and the lender,that way all i pay will have to be signed by him and paid to lender..i am almost positive i need a title search done it..does all agree? i havent bought any real estate since 1991 and have never purchased land from owner w/owner financing..have always before bought from real estate agent,they took care of all paper work..all i had to do was sign on dotted line..only down side i see to the place is its located in illinois,and the gun laws here suk,but terms,acreage,and building are very attractive,should it be surveyed too? tks all

[610Alpha]

whenever buying acreage always have it surveyed, learned that from Dave Ramsey, as well as have a title search done because you will want to get title insurance (cause if there is some long lost relative in the wood pile this could go sour so you want title insurance and if they screw up the title search then they have to pay the long lost relative and you don't lose the property) as well. I highly recommend having a lawyer look over the contract before signing...

Good luck!!

[Yeti]

elittle prety much summed it up for you.

The Title Search protects you, and will instantly tell you if someone has a current lien on the property.

[rvans]

Two words....TITLE INSURANCE.

[goatlady]

Also keep in mind when buying any land via an owner carried contract the actual title of the land remains in the seller's name until the contract is paid in full THEN and only then does the title get changed to the buyer's name. All title insurance will tell you now is what, if anything, is owed on the land by the present owner which includes any property taxes, mortgages, and leins. I do not think it is legal for you to make payment checks out in the seller's name and his mortgage holder's name as YOUR contract is with the seller and his mortgage company has nothing to do with you. I understand the idea that you want to protect your payments, but really don't think you can do it that way. Otherwise, you would also need to add the tax assessor/s name on the check also for prorated property tax payments. Besides you will have no way of knowing how much HIS mortgage payment is and by trying to tie up your payment that way you will most likely be shorting the seller his share of your payments, cause the mortgage company will certainly NOT refund any difference to the seller on a monthly basis. If fact, the seller would be extremely foolish to accept THAT contingency in a contract sale. Possibly a better way to protect you would be to have the contract written with a clause to the effect that IF the seller failed to keep his mortgage and tax payments current and the land under contract goes into forclosure, that you would somehow be able to recoup your investment, but IF there is a mortgage the mortgage company ALWAYS is first in line for any monies realized from the sale of said property, called being in "first position." A better way to find out if the seller is responsible and pay his bills is to pay for a credit check on the seller - THAT will tell you if he is behind on any payments he makes. Your attorney can order a credit check and they are usually much cheaper than title insurance (which is based on the sale price).

[barfife]

Spend the money and hire a property/closing attorney to protect your rights. Should cost you less than $1,000. You will not regret it.

BTW, I am not attorney nor related to one....I just work too hard for my money to give it away.

[claymore]

I agree man, get an attorney. Hope it all works out for you,

[Urban Survivalist]

Forget Illinois come to Arizona the market is down (but so is the job market) so land is affordable and the gun rights are awesome. Head west young man.

[Benn Gleck]

I've bought land on a "land contract" before but we had a family friend who is a realtor represent us. There is a lot of paperwork that I would not attempt on my own unless you are a close personal friend of the seller and then I'd still be cautious.

Remember, Caveat Emptor.

[Benn Gleck]

Forget Illinois come to Arizona the market is down (but so is the job market) so land is affordable and the gun rights are awesome. Head west young man.

I wouldn't want to be in Arizona if we had an EMP or a large CME, no electric, no air conditioning and summer heat = misery. But thats me.

[Klayton]

I think most could handle the no power no AC situation better than they could the no power no heat in Illinois... but hey thats me... (I guess if you wood stoved it, the cold would be tolerable and not require electricity)

Get a lawyer! Never ever trust anybody when it comes down to land or money...

[Fanderal]

Lawyer lawyer lawyer,,,that being said, the one thing that I haven't heard is to make sure that if the the specific acreage you are buying is part of a larger parcel that it has already been subdivided from the larger property, so that when you get the owner paid off, YOUR parcel will be free from any encumbrance on the rest of the property.

There are several operations here in OKLA that like to buy up 160 acres with their bank, and then sell it off 10 or 20 acres at a time on a contract for deed WITHOUT subdividing the property. What has happened in many cases is that not enough money was applied to the senior financing to give a clear title to the end buyer for their parcel, and so they couldn't get a clear deed even though they had paid off their land in full and on time. This leads to THOU$AND$ in legal fees, and years in court.

Make sure that the land you are buying is already free and clear of any holds/liens/encumbrances, and as before, Lawyer up.


JM2C
Fanderal

[610Alpha]

@Fanderal - That's why several of us have said to get Title Insurance because they check to make sure that the land is free and clear and to do a survey to make sure you know what the actual layout is.

Dave Ramsey has a wonderful lesson on buying real estate including acreage.

[Gonzo]

All of the above!
And again get the survey or if it was done recently get a copy of the record, and actually walk out and find the markers so you know where they are. Don't just accept that your line is "this fence" or "that corner".

Fences sometimes get thrown up in the wrong places, etc, and in some states under certain conditions if the fence stands long enough, that's your new property line...

G

[goatlady]

Title Insurance will only show any leins/encumberances recorded AT THE TIME OF the title search. No law says the seller cannot go out a week after the contract is signed and mortgage the property and the buyer would never know that happened. Title Insurance is only valid for a stipulated time period and ONLY covers errors/missed recordings up to and including the actual date of the title search for, most usually 6-12 months, after the sale of the property. It will not cover any leins, etc. recorded AFTER the date of the title search.